What Is Section 321 in Customs, Fulfillment Guide: Definitions + How to Claim Section 321 for eCommerce Shipment

Updated – August 25th, 2025

If you’re a business owner who imports goods to the United States (US), Section 321 might be the game-changer you’ve been looking for. 

This provision by the US Customs and Border Protection (CBP) allows eligible shipments to enter the US tax and duty-free, provided they meet specific criteria.

The best part? It’s 100% legal.

For Canadian eCommerce businesses, understanding and utilizing Section 321 can open up new opportunities for cost-effective cross-border shipping, making it easier to reach US customers without the burden of extra fees.

Scroll down to learn everything you need to know about Section 321, how it works, and how you can leverage it to boost your Canada business.

Disclaimer: This Section 321 super guide does not constitute legal advice.

Table of Contents

What Is Section 321?

For the official definition of Section 321, here’s how CBP describes it:

“Section 321(a)(2)(C) of the Tariff Act of 1930, as amended, authorizes CBP to provide an administrative exemption to admit free from duty and tax shipments of merchandise (other than bona fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800. This exemption is known as a de minimis entry. CBP has created Section 321 programs to enable the agency to monitor and protect against illegitimate trade while providing the public the benefits of duty-free shipments for qualified imports.”

In short, Section 321 allows you to import goods into the US without paying taxes or duties, as long as the total value of those goods is $800 or less. This makes it an attractive option for eCommerce businesses, especially those dealing with high volumes of low-value shipments. 

If you’d like to dive deeper into the specifics, you can find the full details on the official CBP website.

2025 Update: Section 321 after August 29

Effective 12:01 a.m. EDT on August 29, 2025, duty-free de minimis treatment under Section 321 is suspended for all non-postal shipments worldwide. Every low-value commercial parcel now needs a customs entry in  Automated Commercial Environment (ACE) and will incur applicable duties, taxes, and fees. Type 86 no longer provides duty-free clearance.

Postal parcels are dutiable. Carriers must collect duty either as an ad valorem charge tied to the origin’s “effective IEEPA tariff rate,” or a temporary flat fee per parcel for 6 months ($80 if the origin’s IEEPA rate is under 16%, $160 if 16–25%, $200 if above 25%). After 6 months, postal moves to ad valorem only.

Scope and prior actions
China and Hong Kong lost duty-free 321 on April 2, 2025. The July 30, 2025 order expands suspension globally and covers Canada/Mexico-routed parcels. Treat 321 duty-free as unavailable for commercial imports.

If you’ve been using 321
• File informal or formal entries for all low-value imports.
• Consider bulk import plus U.S. warehousing, FTZ or bonded storage.
• Move to DDP pricing and update ETAs, FAQs, and checkout copy. 

Trump Administration’s Impact on Section 321

On February 1, 2025, President Donald Trump signed an executive order that eliminated the de minimis exemption for shipments originating from China, with the policy going into effect just three days later on February 4. This decision directly impacted low-value imports from major e-commerce platforms like Shein and Temu, which had previously benefited from duty-free entry into the U.S.

The move caused immediate concern among businesses, particularly in eCommerce and logistics. Without the de minimis benefit, importers faced added duties, along with the extra burden of formal customs clearance processes for shipments from China. This led to potential port delays, disrupted fulfillment timelines, and increased costs across the board. Many businesses began reassessing their logistics operations, with some exploring U.S.-based warehousing as a workaround.

In response to the backlash, the administration issued a follow-up order on February 7, 2025, temporarily reinstating the de minimis exemption. The exemption would remain in place until the Secretary of Commerce certified that proper systems were ready to accurately process and collect tariffs on these shipments. While this provided some temporary relief, the sudden policy shift created uncertainty, prompting many companies to reevaluate their supply chain strategies for the long term.

How to Claim Section 321 for Your eCommerce Shipment

Here’s what a Section 321 claim typically looks like:

1. Your US customer places an order.

To be entitled to Section 321’s duties and taxes exemption, your US-based customer’s order should have a retail value of $800 or less. Once their order is placed, it will be sent out for picking & packing, then shipping.

2. Their order is sent across the US border.

If the shipment meets all of the necessary requirements, which the carrier will present to the border officer upon request, it should encounter no delays and be able to enter the US duty-free. It will then be handed over to your customer’s chosen domestic carrier.

3. The customer receives their order.

The domestic carrier is responsible for accomplishing the order’s delivery. You should receive a confirmation once your customer has received their order.

De Minimis in Section 321 Definition

In Section 321, de minimis provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800.

The de minimis threshold used to be $200 but was increased with the passage of the Trade Facilitation and Trade Enforcement Act.

Latest Section 321 News 2025

Explore the latest news highlights on Section 321 below.

January: Trump Orders Review of U.S. Trade Policy

Federal agencies must submit findings by April 1, assessing trade deficits, national security risks, and tariff impacts. The administration may use emergency powers to impose tariffs, particularly targeting China over trade imbalances and fentanyl concerns. The review also covers U.S. intellectual property rights, de minimis import exemptions, and potential changes to trade agreements.

(Reference: https://www.dlapiper.com/en/insights/publications/2025/01/america-first-trade-policy)

February: Trump Signs Orders Imposing New Tariffs on Imports

On February 1, 2025, President Donald Trump signed executive orders imposing new tariffs on imports from Canada, Mexico, and China, effective February 4.

The tariffs include an additional 25% duty on imports from Canada and Mexico, with a reduced 10% rate specifically for Canadian energy resources, and a 10% duty on imports from China. Goods already in transit to the United States before 12:01 a.m. on February 1, 2025, are exempt from these tariffs.

The executive orders also suspend the Section 321 customs de minimis entry process, subjecting shipments below $800, often eCommerce retail shipments, to the new tariffs.

These measures are set to remain in effect indefinitely until the president decides to remove them. Further tariff increases are possible if Canada, Mexico, or China retaliate, as all three countries have signaled their intention to do so.

(Reference: https://www.whitecase.com/insight-alert/president-trump-imposes-25-tariffs-canada-and-mexico-and-10-tariffs-china)

Section 321 Infographic

Use our Speed Commerce Section 321 fulfillment infographic to learn what eyewear fulfillment is, how the process works, its challenges, and more.

How Does Section 321 Work for Canada Businesses?

So, how does Section 321 work for Canadian eCommerce businesses? It’s simple!

1. Import inventory through a US port, such as the San Diego or Los Angeles ports.
2. Your inventory is shipped to its destination, where it is held in bond.
3. When an order is ready to be fulfilled, it is picked, packed, and shipped tax and duty-free to the US.

In theory, the core idea is straightforward: if the total value of the goods in a shipment is $800 or less, they can be imported duty-free. This simplifies cross-border trade, especially for businesses that frequently ship smaller orders. 

In practice, Section 321 is all about who’s doing the legwork. A reliable third-party logistics (3PL) provider like Speed Commerce can take care of things like filing paperwork, navigating governmental regulations, and fulfilling orders quickly and accurately.

What About US Customs Laws and Regulations?

When using Section 321, it’s important to understand the various US customs laws and regulations that apply.

Firstly, the duty exemption only applies to goods valued at $800 or less, based on their fair retail value in the country of shipment. But not all goods are eligible for this exemption. Products that require customs inspection, such as harsh chemicals or cleaning supplies, are excluded, along with items subject to Countervailing or Anti-Dumping duties. Goods regulated by specific U.S. agencies like the FSIS, USDA, NHTSA, CPSA, or FDA, as well as cigarettes, cigars, and alcoholic beverages, are not eligible for duty-free entry under Section 321.

Businesses must also ensure they provide accurate proof of the items’ retail value, which is essential for compliance. Plus, every shipment must include detailed consignee information, including names and addresses, to avoid delays or issues at customs.

Entry Type 86 Test Definition

Entry Type 86 is a customs entry type introduced as a test by the CBP in September 2019. It is allowed under Section 321 of the Tariff Act of 1930, which governs de minimis.

Prior to the establishment of Entry Type 86, low-value imports needed to be entered through a formal entry process or the more complex informal Entry Type 11.

There are different entry types for customs because goods of varying values enter the country by different methods for various reasons.

Shipment Limitations

Under Section 321, only one shipment per person or entity (i.e., the brand, company, or business) per day is allowed to qualify for duty-free entry. This means that if your business or its logistics partner tries to claim multiple Section 321 entries in a single day, it could lead to serious legal repercussions, including fines or the loss of eligibility for future Section 321 claims.

To stay compliant, ensure that your carrier or freight shipping partner understands these limitations and does not inadvertently submit multiple claims on the same day.

Section 321 vs. Section 301

Section 321 is sometimes confused with Section 301, but they serve very different purposes. 

Section 301 of the Trade Act of 1974 allows the US to impose trade sanctions on foreign countries that violate trade agreements or engage in practices deemed harmful to US commerce. This has led to the imposition of additional tariffs on goods originating from certain countries, most notably China, under what is commonly referred to as “Section 301 China tariffs.”

For Canadian businesses, the good news is that Section 321 can override these tariffs, as long as the items being shipped meet the de minimis value of $800 or less. This means that even if a product would normally be subject to Section 301 tariffs, it can still enter the US duty-free under Section 321, provided it meets the criteria.

How to Prepare a Section 321 Shipment

To prepare a shipment under Section 321, Canada eCommerce businesses should work closely with their 3PL provider, carrier, or customs broker to ensure that all required information is submitted before the shipment reaches the US border. This step is key to meeting US safety and security standards. 

Necessary details that must be provided include the shipper’s name and address, an accurate description of the goods, their weight and quantity, and the consignee’s name and address.

Remember: Section 321 allows only one duty-free import per person or entity per day. If multiple claims are submitted on the same day, you could face significant penalties, with fines reaching up to $5,000 in some cases. To avoid this, make sure your 3PL provider is not filing multiple Section 321 claims within the same day.

Who Qualifies for Section 321?

To qualify for Section 321, the main requirement is that the value of your shipment must not exceed $800, also known as the “de minimis” threshold.

You are allowed to send only one shipment per day to a single address. Attempting to send multiple shipments to the same address on the same day under Section 321 can result in fines, so it’s important to adhere strictly to this rule. If your shipment meets these criteria, you’re good to go!

Note the following exceptions to what qualifies under Section 321:

• Items that require inspection
• Goods subject to Anti-Dumping Duty (ADD) and Countervailing Duty (CVD)
• Goods regulated by Partner Government Agencies (PGAs), such as the Food and Drug Administration (FDA) and the US Department of Agriculture (USDA).

Top 3 Benefits of Section 321 for Your Canada Business

Here are the top three benefits that make Section 321 an attractive option for Canadian eCommerce businesses looking to expand into the US market:

1. Lower Costs

Section 321 allows Canadian eCommerce businesses to manufacture products overseas and import them into the US without paying duties or taxes, as long as the shipment value is $800 or less.

For example, if you produce low-value items in China, your shipment might be exempt from the Section 301 tariffs, thus significantly lowering your costs. This cost-saving measure can make your products more competitively priced in the US market.

2. Faster Shipments

While you’’ll still need to provide proof of value, Section 321 simplifies the paperwork required for importing products and gaining clearance at the border.

By utilizing the electronic filing system known as eManifest, Canadian eCommerce businesses can expedite the processing of shipments, reducing delays caused by customs hold-ups.

This streamlined process means that your customers receive their orders more quickly, enhancing their shopping experience.

3. Competitive Edge

Saving on international shipping costs through Section 321 can give your eCommerce business a competitive edge in the US market. By bulk shipping products to a US-based 3PL’s fulfillment center or warehouse, you can start shipping orders to US customers domestically. This reduces shipping costs and shortens last-mile delivery times, enabling you to offer better shipping rates and faster service and making your products more attractive to prospective US customers.

Is Section 321 Fulfillment Right for You?

Utilizing Canada as a logistical hub for Section 321 fulfillment can be a strategic advantage for your eCommerce business. Here’s why:

Strategic Location and Established Shipping Networks

Canada, particularly regions like Ontario and Ottawa, boasts well-established shipping networks, especially in the Northeast. These areas are ideal for efficiently and economically distributing goods to the US East Coast. By positioning your inventory in Canada, you can take advantage of these networks to ensure fast and cost-effective deliveries to your US customers.

Dual Market Access

By situating your inventory in Canada, you not only streamline logistics for US deliveries but also gain access to the Canadian market.

This dual advantage allows you to serve two major markets, namely Canada and the US, with one strategic move.

Expanding your customer base while optimizing your shipping processes can significantly enhance your eCommerce business’s growth and profitability.

Section 321 Data Pilot

Section 321 Data Pilot is a public-private partnership that mitigates risk and expedites legitimate low value eCommerce shipments. It is a voluntary test that will enable participants to electronically transmit to CBP certain information regarding Section 321 shipments prior to the shipment’s arrival in the U.S. CBP will use that information to improve its ability to effectively and efficiently identify and target high-risk shipments, including for narcotics, counter-proliferation, and health and safety risks.

How to Avoid Customs Duties When Shipping Under Section 321 Through Canada

Shipping through Canada under Section 321 can also help you avoid or minimize customs duties. Here’s how:

Free Trade Agreements

If your country has a free trade agreement with Canada, you can import goods into Canada without incurring customs duties, and you may also sell these goods within the Canadian market. Canada has free trade agreements with 51 countries, including:

• US
• Mexico
• European Union (EU) member countries
• Japan
• South Korea
• Australia
• New Zealand
• Switzerland
• Norway
• Chile
• Peru
• Colombia
• And many more

Lower or No Tariffs in Canada

Certain goods may be subject to high tariffs when imported directly into the US but may face lower or no tariffs if first imported into Canada.

This makes Canada an attractive entry point for goods that would otherwise be expensive to bring directly into the US.

Duty Deferral Program

Through Canada’s Duty Deferral Program, even goods that are subject to tariffs can be imported without immediate payment of customs duties.

By informing the Canadian Revenue Authority that the imported goods are intended primarily for export, you can defer duties.

Duties are only paid on goods that are sold within Canada, based on quarterly reports. This program provides significant cash flow benefits by delaying the payment of duties until the goods are sold domestically.

Frequently Asked Questions About Section 321 Fulfillment

Q: What is a Section 321?

A: Section 321 refers to a CBP regulation that allows for the duty-free entry of qualifying goods valued at $800 or less. This provision is designed to facilitate the importation of low-value goods, primarily in the context of eCommerce, without requiring formal entry procedures, thereby simplifying the customs process for small shipments.

Q: What is Section 321 merchandise?

A: Section 321 merchandise includes goods that are valued at $800 or less, which can be imported into the US. without paying duties or taxes. These goods must meet specific eligibility criteria, such as not being part of a series of shipments intended to evade duties, and must not fall under any restricted or prohibited categories.

Q: What is Section 321 Data Pilot?

A: The Section 321 Data Pilot is a CBP initiative designed to streamline the processing of low-value eCommerce shipments by using advanced data from participating supply chain partners. Implemented on August 22, 2019, the pilot program tests the benefits of receiving pre-arrival data to enhance risk segmentation and ensure faster clearance for legitimate shipments while maintaining security standards.

Q: What is a Section 321 shipment type?

A: A Section 321 shipment type refers to any shipment entering the US under Section 321 regulations, which permits the duty-free entry of goods valued at $800 or less. These shipments are commonly associated with eCommerce and are subject to simplified customs procedures. This makes them faster and more cost-effective to process.

Q: What are Section 321 programs?

A: Section 321 programs include the Section 321 Data Pilot and the Automated Commercial Environment (ACE) entry. The Data Pilot focuses on testing the benefits of receiving advanced data for low-value shipments to expedite processing, while the ACE entry program provides enhanced visibility into de minimis shipments to ensure compliance with regulatory requirements and improve data accuracy for the CBP and PGAs.

Q: Why did the CBP develop Section 321 programs?

A: The CBP developed Section 321 programs to improve the efficiency and accuracy of processing low-value eCommerce shipments. The Section 321 Data Pilot aims to better identify the responsible entity, the final recipient, and the contents of shipments, while the ACE entry program enhances visibility and regulatory compliance in the de minimis category. These programs help CBP manage the increasing volume of small packages while maintaining security and facilitating trade.

Q: What is Entry Type 86, and how does it differ from Section 321?

A: Entry Type 86 is a CBP entry process that allows for the electronic clearance of goods valued at $800 or less, similar to Section 321. Unlike Section 321, Entry Type 86 requires the submission of additional data elements to the CBP, including information on the importer and product details, which enhances visibility and compliance. While both facilitate the importation of low-value goods, Entry Type 86 is designed for more formal entry processing, allowing for greater oversight and the possibility of involvement by PAGs.

Get Started With Section 321 Fulfillment With Speed Commerce

When it comes to your eCommerce business, saving on costs is just as important as generating revenue. By understanding international shipping and trade laws, such as Section 321, you can reduce or even eliminate costly duties and fees, ultimately keeping more money in your business’s pocket.

That’s where Speed Commerce comes in.

Speed Commerce offers Section 321 fulfillment from our strategically located warehouses in Canada. By importing your inventory into our Section 321-compliant facilities, we can ship orders directly to your US customers, allowing you to maximize revenue while keeping logistics costs low.

Whether you choose to leverage our warehouses in major economic hubs like Toronto or other key locations, you’ll benefit from faster shipping times, reduced customs hassles, and a streamlined supply chain that keeps your customers satisfied and your costs under control.

But our services don’t stop at Section 321 fulfillment. At Speed Commerce, we provide a full suite of 3PL capabilities designed to help your Canadian eCommerce business scale while saving on fulfillment costs. From comprehensive inventory management and secure warehousing to efficient shipping and real-time tracking, we offer everything you need to grow your brand globally.

Ready to take your business to the next level? Partner with Speed Commerce today and start leveraging Section 321 to boost your bottom line and delight your US customers. Contact us today to learn more about how we can support your eCommerce business in Canada.

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